India-US Relationship to Glimpse A Renewed Momentum
India’s Finance Minister Nirmala Sitharaman stated that India and United States relations have developed into a global strategic partnership through many bilateral dialogue mechanisms, and their cooperation is broad-based and multi-sectoral.
While addressing the India-US Business and Economic Opportunities session on the sidelines of the 9th Economic and Financial Partnership (EFP) meet, India’s finance minister Ms. Sitharaman underlined the mutual understanding between both nations and welcomed various historic opportunities for collaboration in economic activity, business relations, and evolving bilateral defense trade. She emphasized how India’s efforts should be seen as a bright spot amid global economic gloom. Treasury Secretary Janet Yellen led the US delegation.
Tracing India’s growth trajectory, geopolitical instability, and a sharper-than-expected world economic slowdown, she noted various reform measures taken by the Indian government to chart the path of Atmanirbhar Bharat. The finance minister highlighted the success of foreign investment regulations and called upon the stalwarts of business and prominent thought leaders to participate and contribute to India’s growth story with a goal of shared prosperity between India and the US.
Recently, Sitharaman held bilateral discussions with Yellen during the 9th EFP, in which Economic Affairs Secretary Ajay Seth, RBI Governor Shaktikanta Das, Chief Economic Advisor V Anantha Nageswaran, and US Federal Reserve Chairman Jerome Powell were present through video conference.
Yellen and Sitharaman led the 9th Economic and Financial Partnership (EFP) meeting, where the two parties discussed mutual interest issues such as climate finance, multilateral problems, taxation, supply chain resilience, India-US cooperation at the G20, and global economic developments.
On Friday, Janet Yellen stated that the US would pursue the friend-shoring approach to deepen economic integration with trusted trading partners like India to diversify supply chains.
Yellen, the Biden administration’s top economic leader, established concerns about the US during intense global economic uncertainty. The US wants India to be at the center of America’s economic ally orbit as increasing food and energy prices stem from geopolitical tensions, and its reliance on other countries' goods has pushed the US to reshape the global economic order and stability.
Microsoft’s growing operations in India are an example of India and the US's joint integration in the technology sector. Yellen mentioned that America’s development finance agency supplied a US solar manufacturer with $500 million in financing to establish a facility in Tamil Nadu. India maintains a strong diplomatic relationship with Russia, which has become its top oil supplier. On the other side of the spectrum, India wants to make itself an international production hub for US companies because, as a trading partner, the US accounts for the largest volume of goods trade in India-US economic history in 2021, and India wants to continue such endeavors in the future.
Yellen also reiterated that the US monetary agencies actively work towards the global regulation of cryptocurrencies, which India has been pressing for. However, with trade trajectories and complex dialogues unfolding, India-US relations are hindered by ebbs and flows. With India’s tilt towards protectionism, lack of infrastructure, and tight regulations, the future transformation remains hazy.
In addition, India should develop its domestic consumer market size to match international levels. India declined to join negotiations over the trade pillar with the World Trade Organization and the Indo-Pacific Economic Framework for Prosperity. Various sides, particularly the West, closely monitor India’s stance on Russia.
Eswar Prasad, a trade policy professor and a former official of the International Monetary Fund, opined that India has deep-seated economic interests in maintaining a reliable and cheap oil supply for Russia. India’s ties with Russia are seen as diplomatic, it would be in India's favor to balance its multilateral relations with other countries, including the US and EU countries.